Reliance Industries Q4 results: Higher margins in petrochem, refining

Reliance Industries on Monday reported a record fourth-quarter net profit of Rs 8,046 crore, buoyed by higher earnings from its petrochemicals business and an 8-year high refining margin.

On a day when it toppled Tata Consultancy Services (TCS) to reclaim India’s most valuable company crown, Reliance also reported its highest ever annual profit of Rs 29,901 crore.

Mukesh Ambani-controlled Reliance is relying on profits from its core refining and petrochemicals business to help its new telecommunications venture, that it said has amassed 72 million paid consumers.

Consolidated net profit for the operator of the world’s biggest oil-refining complex rose to Rs 8,046 crore, or Rs 27.3 per share, in January-March quarter compared with Rs 7,167 crore net profit in the same period of previous year, it said in a statement.

Operating profit, or earnings before interest and tax, from its petrochemicals segment jumped 26 per cent from a year earlier to Rs 3,441 crore, while that from its refining business was almost flat at Rs 6,294 crore.

Reliance earned USD 11.5 on turning every barrel of crude oil into fuel as compared to a gross refining margin of USD 10.8 per barrel in fourth quarter of previous 2015-16 fiscal.

While refining margins are at eight-year high, petrochem EBIT margin at 14 per cent is a five-year high.

Reliance’s retail business crossed Rs 10,000 crore sales mark with Q4 revenue of Rs 10,322 crore, up 83 per cent year-on-year.

Its telecom services, which added 109 million subscribers after starting in September last year with free voice and data services, had 72 million paid users at the end of the quarter.

Its oil and gas production business, however, continues to bleed with pre-tax loss widening to Rs 486 crore in Q4 from Rs 153 crore a year back. The decline was “led by lower upstream production and lower domestic gas price realisation.”

The company’s outstanding debt rose to Rs 196,601 crore as on March 31, from Rs 194,381 crore as on December 31, 2016.  It had cash pile was however up at Rs 77,226 crore as on March 31, from Rs 76,339 crore on December 31, 2016.

Commenting on the results, Ambani said: “During FY 2016-17, the Reliance team shaped the contours of future growth platforms in the consumer and the energy and materials businesses.”

“Operationally, we continue to scale new heights. RIL generated its highest-ever annual profits at Rs 29,901 crore, registering a growth of 18.8 per cent on Y-o-Y basis. Refining and petrochemicals businesses achieved record levels of profitability, underpinned by our ability to access feedstock competitively from global markets, maintain high operating rates and place products in growth markets,” he said.

“With ongoing projects our portfolio will become significantly more robust and integrated, securing long-term profitable growth.”

Reliance Retail has displayed encouraging performance with revenues growing by 60.2 per cent and EBITDA by 40.4 per cent on Y-o-Y basis.“In digital services, the Jio movement is set to transform India. Jio is witnessing the largest migration from free to paid services in history. Jio is committed to provide its customers the highest quality and the world’s most affordable data and voice services,” he added.